Things that Incense

[CAUTION: I took the following post, as indicated below, in its entirety from the Oikonomika Blog, a site to which I refer regularly for news about the economy and the dollar/gold crisis. However, an alert reader has pointed out to me that the newsletter author cited, "Enrico Orlandini", appears to be a pseudonym for Eric Bartoli, who is wanted in the U.S. for having allegedly bilked a lot of people in a Ponzi-like scheme. If that is the case, take what appears below with the usual grain of salt -- or it may even be a case of "it takes one to know one." And please note, also, that the "March of this year" refers to March 2008, not March 2009, since Lehman filed for bankruptcy, and Bank of America announced its acquisition of Merrill Lynch, in September 2008.]

Here's a very enlightening excerpt from Enrico Orlandini's weekly missive, "Dow Theory Analysis", regarding the credit crisis:

"..For those of you who haven’t figured it out yet, the credit crisis and resulting bail outs had nothing to do with concern for the general public.

Two ex-Goldman Sachs men, the Treasury Secretary Henry Paulson and then President of the New York Federal Reserve Bank Timmy Geithner, got together and figured out a way to consolidate Goldman’s power and rid them of the competition at the same time.

They waited until early March of this year when things looked dismal and, in a blaze of cell phone calls between Geithner and Goldman (twenty-one in one day) it was decided that Lehman Brothers and Merrill would disappear, and Goldman would take over the lucrative parts of their business. Bear Stearns was already gone, so Goldman would be the power house and Morgan would get a bone or two thrown its way.

The failure of Lehman was the key though, as it forced Congress to commit to TARP money that would eventually fill Goldman’s coffers. Lehman drew the short stick even though they all were more or less equally leveraged.

Both the Fed and Treasury now clear everything through Goldman, allowing them to make trading profits on 89 out of 92 days in the third quarter, a phenomenal accomplishment to say the least. You, of course, paid for all of this, you have little or no knowledge of it, and you’re not going to receive a single benefit. Your taxes will be raised, you may lose your job, the currency you earn is worth less every day, and they may come and foreclose on your house. How do you like them apples?.."

H/T: Oikonomika Blog